It's easy to assume that the bubble of the metaverse has burst. Late March, WaltDisneyCo.dissolveda 50-member unit that developed metaverse strategies for the group. Two months ago,Microsoftannounced it would beRemove altspace VR.sonya Byte dancePicoThe unit admitted that sales of VR headsets in 2023 will be much lower than predicted. Meta Platforms ramps up layoffs, with the metaverse barely appearing in recent CEO speeches, despite the company rebranding itself as the concept less than two years ago.
Pessimists might argue that the reasons for these companies' disappointment are structural and that we should have seen this deep winter coming. The metaverse was certainly an administrative imagination: according toAnkete Forrester 202275% of CMOs were excited about the metaverse, while only 35% of consumers expressed interest. The metaverse ecosystem also failed to take off, perhaps due to greed. There were few additional selections. Development of programs and tools to reward creators fell short last year, with averse platforms like Horizon Worlds holding backalmost 50% of the traded revenueAnd looking beyond developers, additional technologies are disappointing: VR headsets are clunky and often cause motion sickness, leading to limited adoption.
But despite these signs of coolness, take another look and the data suggests the metaverse is awake and shooting green galore. The total number of monthly active metaverse users exceeded 500 million in the first quarter of 2023, compared to 373 million in the same quarter of 2022, according toMetaverso. Gaming platforms like Fortnite and Roblox attracted an average of 200 million monthly users last year, with the latter reaching its goal of 23% daily active user growth by the end of 2022.
Not surprisingly, companies are lining up to enter the metaverse, albeit with less fanfare. These include retailers such asWalmart, which he madetwo virtual experiencesLast October; clothing brand PacSun, launched by aPacVerse-campagnein November 2022 and another Roblox experience, a Los Angeles magnate, in February; and H&M, which launchedloopopiein January. Even the industrial metaverse is getting stronger:group BMWrecently announced that it will expand its use of Nvidia's Omniverse design platform andvirtually optimize production facilitiesbefore their construction.
Several factors draw companies to the metaverse. First, companies that want to be seen as visionaries can't miss the market created by the next-generation internet. Second, companies can use the metaverse to build brands and better understand customers, especially the next generation, as most users of the metaverse are Generation Z and Generation Alpha. Third, some companies are already generating revenue there:Nikereported for example$186 millionsale of irreplaceable tokens in 2022. In particular, the growing enthusiasm for the birth of an entirely new market has drawn attention to the metaverse. And the pioneers' beliefs and actions will only encourage more companies to enter the metaverse.
The dark dimensions of the metaverse
The metaverse may be attractive, but companies may not realize they face new challenges there. Metaverse strategies require a deeper level of commitment; companies need to provide immersive experiences and sell digital assets themselves, which is not without risk. McDonald's found this out the hard way recently, when it failed to realize there was a racist slur on the menuMcRib NFTcollection.
When companies invite users into virtual worlds of their own making, society expects them to take responsibility for user experiences, just as people think they are.business errorif your ads or promotions appear alongside hate speech, violent images and sexually inappropriate content on social media. That's why companies need to take their "Digital Social Responsibility," or DSR, as we like to call it, seriously if they want to succeed in the metaverse.
Businesses face three types of challenges in the metaverse.
Pointing to the children.Many companies sell to kids, teens, and tweens, who dothe largest user segmentcurrently in the metaverse. This highlights the ethics of targeting young people, as well as corporate concernsusing the naivety of demographicsAfter all, children are unlikely to have developed the ability to distinguish fantasy from reality, which can cause great harm. This is reported by the American non-profit organizationparents togetherSeveral families complained that their children spent between $1,100 and $7,200 on in-app purchases in the metaverse.
Addiction. While gamification is important in the metaverse, gaming addiction has become a major psychosocial problem. According to a recent study, the addictive propensity of VR games is44% morethan in a conventional game. Some parents have reported that children become anxious when they don't play metaverse games, and when they stop playing, they faceanger management and impulse problemsIn the real world. Even governments are taking notice: China has succeededlawsFour years ago it forced companies to limit the amount of time and money children can spend playing online games, and in 2021 it has tightened those laws.
Harassment. Common social media challenges such as sexual harassment, racial slurs, verbal abuse, and invasion of personal space are reinforced in the metaverse. An immersive experience, supported by haptic technology, can convey the touch of the virtual world and make it real. According to Sum of Us, a global non-profit advocacy organization, researchers have discovered her avatarsexual harassment, including virtual rape and groping, in various worlds such as Horizon Worlds and the Rec Room. There's no question that society will hold companies accountable when users feel uncomfortable in the branded worlds of the metaverse.
road lighting
Companies need to develop strategies to establish that they are taking their DSR seriously before regulators force them to do so. They can turn a proactive approach into a strength and ensure that regulation makes the metaverse even better. Businesses need to act simultaneously on three fronts:
Impact on platforms.Companies need to work with platform owners to quickly and aggressively address issues in the metaverse, even before they arise. Platform owners have the technical resources, business rules, and experience to do this. For example, the Meta developed a skillto create safety bubblesaround the avatar, which helps prevent physical harassment.
Companies need to influence platforms, their partners in the metaverse, to do more to protect users, just as they did with social media platforms. Three years ago, as hate speech increasedFacebook, more than 500 companies - fromAdidasGBest BuyAUnileverand Volkswagen joinedstop hatred for profitcampaign launched by several non-profit organizations, which threatened to stop advertising their brands on the platform. forced Facebookhire civil rights leadersinvestigate allegations and fight extremism in public and private Facebook groups.
Pushing platforms to develop preventative measures such as AI-based content moderation will help companies mitigate the risks of doing business in the metaverse. By incorporating these capabilities into their DSR strategies, companies will also be better prepared for upcoming regulations such as those in the UK.Bill on online safety.
Make standards.Industry-wide standards can work well, especially in the absence of legislation, and will facilitate better regulation. The rules may initially affect earnings, but will eventually bring several benefits.
For example, voluntary standards have had success in the video game industry in Japan. In 2002, the Japan Association of Computer Entertainment Providers was foundedComputer Entertainment Rating Organization (CERO),which helped deal with criticism of game content and improved the company's image by providing game ratings. By introducing a widely accepted rating system, the industry has increased the degree of freedom for creators, especially those designing games with an 18+ rating. In fact, the government of Japan recognized the CERO system so strongly that it chose to partner with CEROimprove the evaluation systemin 2006.
Similarly, companies should have industry-wide standards to address, say, the problem of metaverse gaming addiction in children. Remember that when regulations in countries like China expand to other countries, governments will start with existing standards. Developing them proactively will position companies better to work with governments, and perhaps even eliminate the need for legislation.
Develop compliance skills.Sooner or later, traders in the metaverse will need to develop coping skillsregulationsas social networking and online gaming rules gradually expand to the metaverse. For example, the US Federal Trade Commission recently usedThe Children's Online Privacy Protection Act fines Epic Games, which he developedFortnitegame, $520 million.
With averse platforms facing criticism for allowing advertising aimed at children,new regulationsto solve the problem may arise soon. Businesses need to seize the moment to demonstrate their DSR by quickly building compliance capabilities.
It will be essential to set up internal teams for compliance with the regulation. For example in China when the government announced stricter measuresgambling rules in 2021, market leaders had to react quickly. A team was created to interpret the new regulations, design preventive measures and monitor countermeasures for the future. Another introduced several new checkpoints to the review process to ensure game content complies with new legal requirements.
While companies can look the other way to drive long-term growth, they must prepare for the associated challenges. They should develop a set of DSR principles whose implementation should be the joint responsibility of platforms, companies and governments. In fact, stakeholders in the metaverse ecosystem must provide alignment, not only in creating and capturing value, but also in making the metaverse a safe place for all users.
Durationother columns of happiness by François Candelon.
François Candelon is Managing Director and Senior Partner at BCG and Global Director of the BCG Henderson Institute.
Michael G. Jacobides is Sir Donald Gordon Professor of Entrepreneurship and Innovation at London Business School, consultant to BCG andEvolutionlimited.
Lisa Krayer is a BCG Project Manager and BCG Henderson Institute Ambassador.
Winson Chen is a project manager at BCG and an ambassador for the BCG Henderson Institute.
Some of the companies listed in this column are former or current clients of BCG.
FAQs
Why should companies use Metaverse? ›
Users are allowed to make real-life or metaverse purchases while on platforms. Therefore, businesses can use digital worlds as yet another shopping platform to promote, offer, and sell their products, while cryptocurrency ensures easy and open transactions.
How many people will use the Metaverse? ›Currently, the largest virtual Metaverse worlds are Roblox (230 million), Minecraft (165 million), Fortnite (85 million), Zepeto (2 million), Avakin Life (10 million), IMVU (7 million), and Rec Room (7 million).
Who is making the Metaverse? ›The Metaverse, created by Google, it is a virtual reality world where people can explore and interact with immersive 3D environments. It utilizes powerful technology to create compelling interactive experiences and innovative tools for users to communicate their creativity.
Who is responsible for helping to keep the metaverse safe? ›The Global Head of Safety at Meta, Antigone Davis stated that building a safe Metaverse can't be done alone. Last year in November, Nick Clegg, Meta's head of global affairs, said the company is working on building safety and privacy protections for the metaverse.
What is metaverse advantages and disadvantages? ›Lifelike experiences, equal access, better collaboration and new business opportunities, yet there's the potential for higher costs, privacy violations, bullying and addiction.
How the metaverse will change the world? ›The metaverse has the potential to make things more accessible than before. In entertainment, for example, an unlimited number of fans will be able to attend events in the metaverse rather than a select few who can get tickets. In education too, access can be improved by metaverse solutions.
Will the metaverse replace real life? ›For now, the metaverse is a great way to interact with people and experience things that you would not be able to experience in real life. However, it is still too early to tell if the metaverse can truly replace real life. Only time will tell.
Who is the target market of metaverse? ›People are represented in the metaverse by their avatars, a digital version of themselves. According to a survey of companies already invested in the metaverse, the majority target audience is Millennials, Gen Z, and males.
Where is money made in the metaverse? ›The metaverse offers opportunities for investors and gamers. Investors can sell NFTs for a profit, and gamers can play to earn. You might want to hold an event and sell tickets or rent metaverse real estate. For long-term earning, consider a job in the metaverse industry.
What is the biggest metaverse company? ›1 Microsoft
Through its Mesh platform - which will see the creation of a shared virtual space, in which users can interact with each other - Microsoft is making heavy metaverse investments.
Is Amazon a metaverse company? ›
Amazon is pioneering the #Amazonmetaworld—it's metaverse of digital experiences—in 5 cities starting from September 15.
What are the problems with metaverse? ›The challenges of Metaverse include time and space. The concept of time perception can be different if we compare the real world with a virtual environment, as users tend to be less aware of their bodies while inside the Virtual Reality.
What is metaverse responsibility? ›The Responsible Metaverse Alliance (RMA) is a social enterprise and international movement dedicated to supporting the development of the metaverse, and virtual worlds, so that they are handled responsibly from a perspective of design, deployment, safety, culture, inclusion, operations and function.
What are the risks of entering the metaverse? ›- Increase in Personal Data Collection. Data collection is an ingrained part of the metaverse experience. ...
- Lack of Regulatory Oversight. ...
- Identity Theft and Fraud. ...
- Risks of Virtual Currencies and Assets. ...
- Impersonation. ...
- Abuse and Harassment. ...
- Threats From Automated Bots. ...
- Inaccurate AI.
Will the Metaverse Harm the Environment or Bring Us Closer to Environmental Sustainability? VR technologies of the future will require a significant amount of energy, and the Metaverse effect could lead to a drop in real-world exploration, which would potentially be harmful to the environment.
What is the biggest concern about meta? ›The biggest concern with Meta is privacy.
What are the biggest benefits of the metaverse? ›One of the biggest benefits of the metaverse is the potential to overcome barriers to education, such as geographic location or socioeconomic status. Students from all over the world could participate in virtual classrooms, have access to the same learning materials, and interact with each other.
How will metaverse impact everyday life? ›Therefore, a virtual world like the metaverse has the potential to change how businesses and individuals view and use technology. 1. Education: Using virtual reality headsets, students and teachers may connect in the digital world regardless of where they are in the physical world.
Why will metaverse fail? ›Metaverse lacks maturity
The VR and AR aspects clearly lack maturity which is demonstrated through Mark's recent announcement, 'Meta has been able to develop legs for their avatars'. The legs were actually animated in the demo.
The metaverse has the potential to redefine almost every sphere of our daily lives, from healthcare and education to work, commerce, and recreation. Few concepts have ever held such promise, but questions remain over the scale and scope of its implementation. What's clear is that the technology is here to stay.
Why is metaverse not the future? ›
Tim Cook Says The Metaverse Isn't The Future Because People Don't Understand It – They Might Not Have To.
Who owns metaverse? ›In the case of the Facebook Metaverse, it is owned by the company founder and CEO, Mark Zuckerberg. Decentraland was created by Ari Meilich and Esteban Ordano for a company called Metaverse Holdings Ltd., which and a number of investors own the rights to the digital universe.
Who uses the metaverse? ›Microsoft. Microsoft has made headway in the metaverse space by providing a business function that builds on Microsoft Teams. Microsoft Mesh allows people to meet virtually through avatars—or, in the future, holograms—to attend events, meetings and conferences.
What is Coca Cola doing in the metaverse? ›Coca-cola partnered with Tafi to develop and design their first NFTs in the metaverse. Coke fans can receive apparel, trading cards, and other accessories for their avatars to show their love of Coca-Cola and all the brand offers.
What companies are pushing metaverse? ›- Decentraland. Decentraland is a virtual-reality platform and metaverse powered by the Ethereum blockchain – and one of the most well-known names in the space. ...
- The Sandbox. ...
- Roblox. ...
- Axie Infinity. ...
- Battle Infinity. ...
- Bloktopia. ...
- Unity. ...
- NFT Worlds.
- Sony Group (SONY) In a June 2022 interview, CEO Kenichiro Yoshida revealed the metaverse as a growth area for Sony, with building a metaverse around entertainment as its first priority. ...
- Match Group (MTCH) ...
- Take-Two Interactive Software (TTWO) ...
- Nvidia (NVDA) ...
- Autodesk (ADSK) ...
- Microsoft (MSFT)
Indeed, Facebook's rebrand as Meta seems to signal Mark Zuckerberg's conviction that reality as a whole is going to fall out of favor. The metaverse wasn't his idea — the name comes from Neal Stephenson's 1992 novel Snow Crash — but his company has reportedly spent some $36 billion developing it.
Which country uses the metaverse the most? ›Join us on social networks
A recent analysis of more than a million tweets showed a list of countries that love and hate the metaverse, with Vietnam showing the most love for the concept and Ireland topping the opposite side of the spectrum.
These transactions are usually made with fiat currency. There are two main types of fiat-based virtual economies. The first are those that use a central payment processor, such as PayPal, and major credit card networks like VISA, Mastercard, and American Express.
Who is leader in metaverse? ›Microsoft Corp.
Microsoft may be the early leader in the professional metaverse. The Microsoft enterprise metaverse aims to integrate the Internet of Things, digital twins and mixed reality and help Microsoft grow its professional software market dominance.
What companies will profit most from metaverse? ›
This article looks at 5 of the best metaverse stocks to buy in 2022: Meta Platforms Inc., Microsoft Corp., Nvidia Corp., Roblox Corp. and Matterport. All of these companies have different products and services that will benefit from the growth of the metaverse.
Who owns the largest metaverse land? ›The biggest metaverse real estate transaction was a $5 million purchase by Curzio Research for 19 commercial properties in TCG World. The deal was announced on May 22, 2022.
Is Walmart on metaverse? ›The latest is Walmart, a retail giant who, towards the end of last month, announced that they had partnered with Roblox, a leading light in the metaverse, to create two immersive online experiences.
Who are the biggest players in metaverse? ›Some of the major players in the market include Meta Platforms, Microsoft, Nvidia, Tencent Holdings Ltd, Roblox Corporation, Nextech AR Solutions Inc, Unity Software Inc, Bytedance, Epic Games, Inc., Decentraland, Antier Solutions, and Alibaba Group Holding Limited.
Is Google a metaverse company? ›Google itself is not a Metaverse stock, but its parent company, Alphabet, is a prime tech giant among the biggest stocks in the Metaverse.
How many people will use the metaverse by 2030? ›Its reach is projected to be 700 million people worldwide by the end of the decade. This chart shows several possible scenarios for metaverse market growth between now and 2030.
Will everyone use metaverse? ›Virtual worlds and immersive online spaces will continue to develop in significance, but 500 million people won't be living in 'the metaverse' in any more meaningful way in 2040 than 2022.
Do only 30 people use metaverse? ›It's Lonely In Metaverse; A Recent Data Suggests That It Has Only 30 Daily Active Users. The Ethereum-based community of Decentraland had only 38 "active users". Users may purchase and trade virtual properties in the sandbox area known as the Metaverse Project Decentraland, which isn't exactly bustling.
Is metaverse growing in popularity? ›Report Overview. The global metaverse market size was estimated at USD 65.5 billion in 2022. It is expected to grow at a compound annual growth rate (CAGR) of 41.6% from 2023 to 2030.
Who will have the biggest metaverse? ›- Epic Games.
- Google.
- Meta.
- Microsoft.
- NVIDIA.
- Roblox.
- The Sandbox.
- Unity.
What will metaverse be in 5 years? ›
In the next five years, we expect the metaverse and automobiles to develop in tandem. In addition to the virtual drive engine, more perceptive technologies such as touch and taste could be integrated, and possibly even developing a unique transaction method via blockchain in the metaverse for the automotive industry.
How will metaverse impact business and social behavior? ›The metaverse will bring together elements of the ordinary internet, with social media, immersive environments, online games, and other work and leisure activities. It will combine them into persistent, synchronous environments in which people can spend time, transact business and engage in leisure activities.
Who uses metaverse today? ›Microsoft. Microsoft has made headway in the metaverse space by providing a business function that builds on Microsoft Teams. Microsoft Mesh allows people to meet virtually through avatars—or, in the future, holograms—to attend events, meetings and conferences.
What will the metaverse allow us to do? ›The Metaverse allows users to interact with products in a way that is impossible via e-commerce or online stores. One's avatar can enter a virtual shop, walk through the aisles, try out products such as apparel or shoes, and make payments directly in cryptocurrency.
What age group is metaverse for? ›| Metaverse gamers age | Share of gamers |
|---|---|
| 10-20 | 38% |
| 21-35 | 36% |
| 36-50 | 22% |
| 51-60 | 4% |
More than half (51%) of global users of metaverse virtual worlds are aged 13 or under. 14. And 83.5% of metaverse virtual worlds users are under 18.
How much does metaverse cost? ›Metaverse Development Cost Across Industries
Cost Of Development- On average the development cost of Metaverse games lies between $30,000-$300,000. Cost Of Development- Depending on the complexity of the social media Metaverse the development cost can be from $25,000 to $400,000.
The 2003 virtual world platform Second Life is often described as the first metaverse, as it incorporated many aspects of social media into a persistent three-dimensional world with the user represented as an avatar, but historical claims of metaverse development started soon after the term was coined.
Who are the key players in the metaverse market? ›Key players profiled in metaverse market report include Meta (US), Microsoft (US), NetEase (China), Electronic Arts (US), Take-Two (US), Tencent (China), Nexon (Japan), Epic games (US), Unity (US), Valve (US), Accenture (Ireland), Adobe (US), HPE (US), Deloitte (UK), Ansys (US), Autodesk (US), Intel (US), Tech Mahindra ...